Sporting News looks for scale in deal with AOL Sports

With its broad content-providing arrangement with AOL Sports announced late last week, it's clear that Sporting News is making an aggressive push to become a top-10 sports website. By creating Sporting News on AOL, targeted for a March 1 launch, the aim is to instantly give the 125-year-old sports brand digital relevance. Meanwhile, for AOL, the deal could be seen as a signal that it's less interested in creating original content in some of its original focus areas.

"We've made a lot of headway as far as adding video and developing a social media strategy," said Sporting News President and Publisher Jeff Price. "Adding scale was the last thing advertisers were asking for, and this deal allows us to deliver that."

While traffic trends on AOL Sports have fluctuated during the last year, it is still considered a destination site. According to December comScore data, AOL Sports attracted 9.7 million unique users, while SportingNews.com garnered 2.9 million. Even assuming some duplication, combining those two numbers would put Sporting News on AOL easily in the top 10 among sports sites for the month.

"The vision is one of providing real-time breaking sports news with a dynamic social media strategy and high-quality columnists and overall great journalism," said David Eun, president of AOL Media.

Sporting News is owned and operated by American City Business Journals, parent company of SportsBusiness Journal/Daily.

Sports content for AOL has been under its internally developed Fanhouse brand for two years. Starting in March, Sporting News will provide and develop a majority of the content for the site from its current staff, which is primarily based in Charlotte. Sporting News will license the Fanhouse brand from AOL and use it as a home for the site's "voice," or columnists. Sporting News is expected to add a handful of top sports columnists from AOL, but sources said a number of AOL Sports editorial staffers have already been seeking jobs at other sites.

TOP 10 SPORTS SITESFOR DECEMBER 2010

Ranked by No. of unique visitors

SITE

VISITORS (000s)

Yahoo! Sports

52,123

ESPN.com

40,158

FoxSports.com

26,719

NFL.com

26,276

CBSSports.com

22,938

Big Lead Sports

19,059

Turner-SI Digital*

17,270

FanHouse (AOL Sports)

9,728

NBCSports.com

8,742

BNQT.com

7,849

* Portfolio includes NBA.com, NASCAR.com and PGATour.com

Source: comScore

It was unclear if any AOL Sports' management will join Sporting News.

Sports covered by Sporting News — the NFL, NBA, NHL, MLB, NASCAR, and college football and basketball — will be the core of the site, but it also now will include soccer coverage. Editorial coverage of the Olympics, tennis, golf and some niche sports, which aren't covered by Sporting News, will continue to reside on AOL under AOL's direction.

All Sporting News on AOL content will continue to be free.

According to media industry sources, other companies looking at a similar relationship included Turner, NBC, CBS, Fantasy Sports Ventures and ESPN.Price said he was pursuing a similar alliance with Yahoo! for some time, but when that deal didn't come together, he reached out to AOL Chief Executive Tim Armstrong late last year. While both sides were mum on the structure of the deal, others who considered the proposal said AOL was looking for a deal in excess of five years that would pay AOL a fee for traffic directed, along with incentives for increased traffic and advertising. Sporting News will sell the ad inventory.

"Anyone would look at a deal that adds that much traffic," said Jimmy Lynn, former AOL Sports vice president of partnerships and strategic development, who's now an independent consultant. "It makes the most sense for Sporting News, because they'll have a seat at the table now in a lot of important ad buys across Web sports. What's amusing to me is that Jeff tried to do a deal like this with AOL so many times when he was at Sports Illustrated."

Price was president of SI Digital from 2005 to 2009.

American City Business Journals bought Sporting News from Paul Allen's Vulcan Sports Media in 2006. The granddaddy of U.S. sports titles has been striving to find relevance against entrenched print and broadcast competitors that embraced the Internet earlier and more successfully, like Sports Illustrated and sports-heavy TV networks such as ESPN, Fox, NBC and CBS. It has made dramatic changes to its biweekly magazine and launched the digital Sporting News Today in 2008, and while it did a massive relaunch of SportingNews.com in August, it had yet to find a national audience.

This deal, even with a declining trend in AOL Sports traffic, will likely change that.

"Of the top 10 sites, we will be one of very few not tied into TV programming," Price said. "That should allow us an independent voice — something fresh that we can bring to advertisers."

Like Sporting News, AOL is seeking new relevance in a market with changing dynamics. In announcing the deal, Armstrong said that he would begin outsourcing other key areas, AOL's health and real estate sections. Such moves indicated that AOL was moving away from premium content for a shift toward being a portal, getting content from elsewhere. But the value of portals is increasingly questioned by consumers, now accustomed to an endless variety of sites on nearly any subject, no matter how niche. For AOL, the deal counters a similar MSN/FoxSports.com content alliance. How partnering with Sporting News fits into Armstrong's overall content strategy is unclear, as AOL has acquired technology site TechCrunch, social networking site AboutMe, and Patch, which calls itself a collection of "hyperlocal news sites." Some analysts have said AOL sees its future as a provider of local/personalized content.

IN PROFILE: Fanhouse (AOL Sports)

Dec. 2009

Jan. '10

Feb.'10

March '10

April '10

May '10

June '10

July '10

Aug. '10

Sept. '10

Oct. '10

Nov. '10

NO. OF UNIQUE VISITORS (000s)

12,162

12,432

13,973

11,212

11,202

10,363

10,203

9,666

9,991

9,435

10,695

10,615

MINUTES SPENT PER USER

10.7

7.5

8.9

8.3

8.5

7.6

7.8

9.3

9.6

15.5

13.6

15.1

Source: comScore

Whatever the overall AOL content strategy, this much is clear: AOL touted Fanhouse as its own sports content play; now, it is seeking sports content elsewhere.

"AOL is looking for dramatic ways to improve its business in a variety of content areas," said Derrick Heggans, the former general manager of AOL Sports, now managing director of the Wharton Sports Business Initiative at the University of Pennsylvania. "So this could be a test run for some other content areas. For the Sporting News, this looks like a great way for them to challenge the competition with scale that matters."

Eun said content decisions are being made on a case-by-case basis.

"We look at our current presence, the competitive landscape, our financial upside, what interesting companies we could possibly acquire — those are all the factors being weighed," he said. "In this particular case, we just thought the Sporting News/Fanhouse combination was a very intriguing one."